Written Commentary
INTEREST RATE MARKET FUTURES
New York Federal Reserve Bank President John Williams said he does not see the need for a rate cut in the near term.
Federal Reserve speakers today are Michael Barr at 9:00, Thomas Barkin at 9:00, Patrick Harker at 9:30, Loretta Mester at 11:00 and Raphael Bostic at 2:50 PM.
Financial futures markets are predicting there is a 70% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at its September 18 meeting.
The fundamentals and technicals have improved for futures, especially at the long end of the yield curve.
STOCK INDEX FUTURES
Housing starts in April were 1.360 million when 1.435 million were expected, and building permits were 1.440 million when 1.480 million were anticipated.
Jobless claims in the week ended May 11 were 222,000 when 220,000 were predicted.
The May Philadelphia Federal Reserve manufacturing index was 4.5 when 7.8 was forecast.
Import prices in April increase 0.9% when up 0.2% was expected, and export prices were up 0.5% when a gain of 0.2% was anticipated.
Industrial production in April was unchanged when a 0.1% increase was expected, and capacity utilization was 78.4% as anticipated.
The fundamentals and technicals remain supportive.
CURRENCY FUTURES
The U.S. dollar index is a little higher.
The Japanese yen is lower on news that Japan’s economy contracted in the first quarter of 2024. Gross domestic product shrank 0.5% quarter-to-quarter in the first quarter, which compares to market estimates of a 0.4% decline.
The total number of employed people in Australia increased by 38,500 in April, which was much higher than expectations of 22,400 people. However, Australia’s unemployment rate increased more than anticipated to 4.1% in April from 3.8% in March.
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